Lawsuits say prices jacked up for hotels, gas

Nov. 29, 2012

Homes in Union Beach destroyed by superstorm Sandy. The state Tuesday filed lawsuits against 10 businesses accused of price gouging after the storm, including seven hotels taking in people left homeless by Sandy. / PETER ACKERMAN/STAFF PHOTOGRAPHER

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Before Sandy hit the shores of New Jersey, state officials warned businesses against trying to make an extra buck off customers struggling during the storm’s aftermath.

On Wednesday, Gov. Chris Christie and other officials said the state has just filed lawsuits against seven hotels and three gasoline stations, accusing them of illegally overcharging customers during the state of emergency.

During a state of emergency, it is illegal for businesses to raise prices by more than 10 percent what they were beforehand.

The state says the gas stations raised prices to more than $4 a gallon, including a Lukoil gas station in Piscataway that hiked its price at the pump to $4.50. Collectively, the seven hotels are accused of committing more than 1,000 instances of price gouging, the state said.

“The last thing people put out of their homes in a natural disaster should have to confront is price gouging from unscrupulous profiteers,” Christie said in a statement. “It’s illegal, offensive and completely opposite the spirit of cooperation we saw just about everywhere else in our state in the aftermath of Hurricane Sandy.”

The Lukoil station, located at 152 Old Brunswick Road in Piscataway and owned by Shiv Shivam Inc., allegedly raised the cash price of regular grade gasoline from $3.49 to $4.50 per gallon, the state said.

But the station’s cost for the gasoline only increased 7 cents per gallon. The state Division of Consumer Affairs received complaints against the station from 16 consumers.

A telephone call to the station for comment was not answered.

Four northern New Jersey hotels owned by North Bergen-based Ratan Hospitality Group — a Ramada Inn in East Orange, a Holiday Inn Express in North Bergen, and Howard Johnson Express hotels in Clifton and Parsipanny — are accused of a total of more than 500 incidents of price gouging. The hotels raised their rates by 30 percent to 151 percent, the state said.

The Parsipanny hotel was named in a first round of lawsuits filed earlier this month.

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“This one company and its four hotels allegedly committed a staggering number of violations of the price-gouging law, and each separate violation merits a penalty of up to five figures,” state Attorney General Jeffrey S. Chiesa said. “Safe, comfortable lodging is not a luxury when people have been displaced from their homes during a state of emergency. It is a basic necessity.”

Newark attorney Patrick McGovern, who represents Ratan Hospitality, said the company and its four hotels have cooperated fully throughout the investigation.

“There are two sides to every story. We’ve begun to tell our story to the Attorney General’s office,” McGovern said. “The initial responses indicates to me that they’re receptive to hearing our side of the story.”

The company hopes to meet with the Attorney General’s office as early as next week, he said. “We hope, through the process of a two-way information exchange, that will lay the groundwork for resolving the claims to everybody’s satisfaction.”